Capital Budgeting and Investment Appraisal (AF-055) Training Course

Capital Budgeting and Investment Appraisal

Capital investment decisions commit large amounts of money for many years and are difficult to reverse. Choosing the wrong project, underestimating costs or ignoring risk…

5 daysClassroom or online

49Upcoming dates

12Cities

£2,250Fees from

Course overview

Introduction

Capital investment decisions commit large amounts of money for many years and are difficult to reverse. Choosing the wrong project, underestimating costs or ignoring risk can damage financial performance long after the decision makers have moved on.

This Capital Budgeting and Investment Appraisal training course equips participants with the tools to evaluate investment proposals rigorously and consistently. Participants learn how to prepare relevant cash flows, estimate the cost of capital, apply discounted cash flow techniques and interpret the results of net present value, internal rate of return, payback and profitability index measures.

Beyond the calculations, the course addresses risk analysis, capital rationing, real options thinking, strategic and non-financial factors, and the governance processes that help organisations allocate capital wisely and review the results of past investments.

Course Objectives

By the end of this training course, participants will be able to:

Explain the capital budgeting process and its role in strategic resource allocation
Identify relevant cash flows, including working capital, tax and terminal values
Estimate an appropriate discount rate using cost of capital principles
Apply net present value, internal rate of return, payback and profitability index methods
Analyse investment risk using sensitivity, scenario, break-even and simulation techniques
Prioritise projects under capital rationing and compare mutually exclusive options
Incorporate strategic, non-financial and real options considerations into decisions
Design governance, approval and post-investment review processes

Target Audience

This training course is suitable for a wide range of professionals, including:

Finance managers, analysts and financial controllers
Corporate finance and investment professionals
Project and engineering managers preparing capital proposals
Strategy and business development managers
Members of investment committees
Public sector officers evaluating capital programmes
Internal auditors reviewing capital expenditure

Training Methodology

Learning is highly applied. Each technique is introduced with a short explanation and then practised in spreadsheet exercises using realistic investment cases from manufacturing, energy, infrastructure and services. Participants work in teams to evaluate competing proposals and defend their recommendations in a simulated investment committee.

Target Competencies

Discounted cash flow analysis
Cost of capital estimation
Investment risk analysis
Capital allocation and prioritisation
Business case evaluation
Investment governance

Course outline

1Day One: The Capital Investment Process

Strategic Role of Capital Budgeting: Linking investment to long-term objectives
Types of Investment: Replacement, expansion, compliance, strategic and innovation projects
The Investment Lifecycle: Idea generation, screening, appraisal, approval and review
Time Value of Money: Compounding, discounting and annuities
Common Decision Biases: Optimism, sunk costs and anchoring
Building a Sound Business Case: Structure and required evidence
Case Study: Reviewing a capital proposal that failed to deliver

2Day Two: Cash Flows and the Cost of Capital

Relevant Cash Flows: Incremental, opportunity and allocated costs
Working Capital, Tax and Inflation: Adjusting cash flow forecasts correctly
Terminal Values and Project Life: Estimating long-term value
Cost of Equity and Cost of Debt: Principles and estimation approaches
Weighted Average Cost of Capital: Calculation and appropriate use
Project-Specific Discount Rates: Adjusting for risk and financing
Practical Exercise: Building the cash flow forecast for an expansion project

3Day Three: Appraisal Techniques

Net Present Value: Calculation, interpretation and decision rules
Internal Rate of Return: Strengths, limitations and multiple-rate problems
Payback and Discounted Payback: Uses in liquidity-constrained settings
Profitability Index and Equivalent Annual Cost: Comparing projects of different sizes and lives
Lease Versus Buy Decisions: Comparing financing alternatives
Capital Rationing: Ranking and selecting projects under budget limits
Workshop: Evaluating and ranking a portfolio of competing proposals

4Day Four: Risk and Strategic Considerations

Sensitivity and Break-Even Analysis: Identifying critical assumptions
Scenario Analysis: Best, expected and worst case outcomes
Monte Carlo Simulation: Concepts and practical spreadsheet application
Real Options Thinking: Valuing flexibility to expand, delay or abandon
Non-Financial Factors: Safety, sustainability, reputation and strategic fit
Multi-Criteria Decision Analysis: Combining financial and qualitative factors
Practical Exercise: Risk analysis of a major equipment investment

5Day Five: Governance and Post-Investment Review

Capital Governance Frameworks: Authority levels, gates and committees
Challenging Business Cases: Key questions for reviewers
Monitoring Approved Projects: Cost, schedule and benefit tracking
Post-Investment Reviews: Comparing outcomes with original assumptions
Improving Future Decisions: Feeding lessons into appraisal guidelines
Communicating Investment Recommendations: Clear, balanced presentations
Simulation: Investment committee presentation and decision

Frequently asked questions

How long is the Capital Budgeting and Investment Appraisal course?

The course runs over 5 days of classroom training, usually Monday to Friday.

When is the next Capital Budgeting and Investment Appraisal course?

The next public date is 7 - 11 Dec 2026 in Barcelona. There are 49 upcoming dates in total.

Where is this course held?

Upcoming sessions run in Barcelona, Frankfurt, London, Rome, Vienna, Amsterdam, Cape Town, Dubai, Istanbul, Kuala Lumpur, Munich, Paris.

Can I take Capital Budgeting and Investment Appraisal online?

Yes. Every date can also be joined live online in a virtual classroom with the trainer, for £1,280 per participant. Choose "Live online" in the dates table when you register.

How much does the course cost?

Fees start from £2,250 per delegate, depending on the city. Fees include tuition and course materials.

Do participants receive a certificate?

Yes. Delegates who complete the course receive a London Leadership Management Innovation certificate of completion.

Can this course be delivered in-house for our team?

Yes. LLMI can tailor and deliver this course privately for your organisation at your premises or in one of our training cities.

Course information last updated 14 November 2026.

Capital Budgeting and Investment Appraisal

Course overview

Introduction

Course Objectives

Target Audience

Training Methodology

Target Competencies

Course outline

Dates and fees

Frequently asked questions

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